Untitled Flashcards Set

Lack of management expertise

A key reason for business failure due to insufficient skills or knowledge to run the business effectively.

Involuntary cessation

A situation where a business ceases operations due to external pressure from creditors.

Voluntary cessation

When a business owner decides to stop operating the business to prevent further debt accumulation.

Bankruptcy

A declaration that a business or person cannot pay their debts, which can be voluntary or involuntary.

Realisation

The process of converting a business’s assets into cash.

Voluntary Administration

A process in which an independent administrator is appointed to operate a company that is insolvent, with the hope of resolving its financial issues.

Liquidation

The process of winding up a company, where its assets are sold to pay off creditors.

Receivership

A state in which a receiver is appointed by creditors or the courts to manage a business's affairs, without necessarily closing the business.

Insolvent

A condition where a company cannot pay its debts as they fall due.

Creditors

People or businesses to whom money is owed.